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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income (loss) before income taxes consists of the following:
Year Ended December 31,
202420232022
United States$17,039 $(3,568)$(31,061)
Foreign3,363 8,214 (1,856)
Income (loss) before income taxes$20,402 $4,646 $(32,917)

The Company is subject to income taxes in U.S. federal, state, and foreign jurisdictions. The provision for income taxes in the accompanying consolidated financial statements is comprised of the following:
Year Ended December 31,
202420232022
Current taxes:
Federal$9,477 $836 $156 
Foreign2,043 1,784 868 
State2,521 775 160 
Total current taxes14,041 3,395 1,184 
Deferred taxes:
Federal(871)227 11 
Foreign(222)74 (264)
State79 — — 
Total deferred taxes(1,014)301 (253)
Provision for income taxes$13,027 $3,696 $931 
The reconciliation of the United States statutory tax rate to the Company’s effective tax rate included in the accompanying consolidated statements of operations is as follows:
Year Ended December 31,
202420232022
U.S. federal taxes at statutory rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit6.7 26.4 2.4 
Foreign income tax rate differential(1.7)10.1 (4.1)
Impact of disposition of foreign subsidiaries— — 6.1 
Non-deductible expenses— 0.0 0.0 
Foreign derived intangible income deduction (11.7)(12.4)0.2 
Non-deductible executive compensation4.4 26.3 — 
Permanent differences2.7 7.0 — 
Deferred statutory rate changes— (0.7)(2.9)
Stock compensation8.0 3.5 (1.4)
Foreign research and development incentive(1.7)(7.7)1.7 
Tax attribute expiration4.3 37.4 (2.8)
Change in valuation allowance29.4 (28.7)(21.0)
Other, net2.1 (2.6)(2.0)
Effective tax rate63.5 %79.6 %(2.8)%
The Company’s effective tax rate for the year ended December 31, 2024 differs from the U.S. statutory rate primarily due to non-deductible executive compensation, the jurisdictional mix of earnings, and state income taxes, partially offset by the change in the valuation allowance maintained against its net deferred
tax assets. The Company’s effective tax rate for the years ended December 31, 2023 and December 31, 2022 differs from the U.S. statutory rate primarily due to the jurisdictional mix of earnings and the valuation allowance maintained against its net deferred tax assets.
Deferred tax assets and liabilities reflect the net tax effects of net operating loss carryovers and the temporary differences between the assets and liabilities carrying value for financial reporting and the amounts used for income tax purposes. The Company’s significant deferred tax assets (liabilities) components are as follows:
As of December 31,
20242023
Deferred tax assets:
Net operating loss carryforwards$9,152 $4,788 
Capitalized research and development expenditures21,684 13,535 
Accruals and reserves3,109 1,868 
Stock-based compensation2,918 1,458 
Intangibles560 760 
Depreciation122 98 
Capital loss carryforwards1,837 1,838 
Finance lease2,881 3,749 
Other deferred tax asset carryforward331 754 
Gross deferred tax assets42,594 28,848 
Valuation allowance(33,037)(20,453)
Total deferred tax assets9,557 8,395 
Deferred tax liabilities:
Depreciation(483)(447)
Intangibles(3,159)(1,091)
Deferred commissions(3,070)(2,883)
Operating lease right-of-use assets(2,602)(3,663)
Other(1,864)(1,150)
Total deferred tax liabilities(11,178)(9,234)
Net deferred tax liabilities$(1,621)$(839)
The Company’s valuation allowance increased by $12,584, primarily as a result of our current year operating results, an increase in the capitalized research and development expenses and an increase in the deferral of certain stock-based compensation expenses against which a valuation allowance is maintained during the year ended December 31, 2024. In assessing the ability to realize the Company’s net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income projections to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Based on the negative evidence, including the worldwide cumulative losses that the Company has incurred, the Company has determined that the uncertainty regarding realizing its deferred tax assets is sufficient to warrant the need for a full valuation allowance against its worldwide net deferred tax assets.
As of December 31, 2024, the Company had no U.S. federal net operating loss carryforwards. As of December 31, 2024, the Company had a U.S. capital loss carryforward of $8,062 that expires in 2027. As of December 31, 2024, the Company had U.S. state net operating loss carryforwards of $12,940, substantially all of which expire at various dates through 2043. As of December 31, 2024, the Company had net operating loss carryforwards of $28,017 in other foreign jurisdictions that expire at various dates through 2029.
At December 31, 2024, 2023, and 2022, the Company had no recorded liabilities for uncertain tax positions. In addition, at December 31, 2024, 2023, and 2022, the Company had no accrued interest or penalties related to uncertain tax positions. The Company’s accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.
The Company files income tax returns in the U.S. federal tax jurisdiction, various state, and various foreign jurisdictions. The Company is currently open to examination under the statute of limitations by the Internal Revenue Service and material state jurisdictions for the tax years ended 2021 through 2023. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by authorities for tax years before 2019.
The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $5,457, as such amounts are considered to be indefinitely reinvested in these jurisdictions. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions. The amount of any unrecognized deferred tax liability related to undistributed foreign earnings is immaterial.